State-owned Permanent TSB has been accused of double crossing its customers by selling their mortgages.

The loans are being moved out of the State-owned lender, despite a practice across the banks that people in arrears who engage do not have their mortgages sold.

It is the second time this year the bank has disposed of mortgages.

The complicated deal will see the mortgages put into a securitisation vehicle and serviced by Pepper Finance. Many of the 6,272 mostly residential mortgages had been taken out of another loan sale this summer after the bank came under sustained criticism.

Some 66pc of them are split mortgages, where homeowners under financial pressure make payments on part of the loan, with the rest parked and dealt with at a later date.

Consumer advocate Brendan Burgess said the move was "an absolute disgrace" as the mortgage holders were adhering to revised payment terms.

He said he has supported the previous sales of non-performing loans to vulture funds.

"But this transaction is very different. All of these loans have been treated and are performing in line with their treatment," he added.

Mortgage arrears campaigner David Hall accused the bank of not acting fairly towards its customers.

"The bank has double-crossed its customers by selling their loans after agreeing split deals with them," he said.

And Fianna Fáil finance spokesman Michael McGrath said people whose mortgages are leaving Permanent TSB would feel very let down.

"These mortgage holders did all the right things," he said. "They entered into a restructuring arrangement and could reasonably expect that the bank would stay the course with them. They will feel very let down."

He questioned if Pepper would take a different view to PTSB on the split mortgage arrangements in place.

But Finance Minister Paschal Donohoe has insisted mortgage holders whose loans are being transferred out of Permanent TSB will have revised payment agreements honoured.

He said those affected should be confident the code of conduct on mortgage arrears will be "upheld rigorously" by the Central Bank.

Asked if it had double-crossed the mortgage holders, a spokesperson for the bank said no promises had been made to anyone not to sell the loan. "On the contrary, the bank made it clear at recent Oireachtas Committee meetings that it would undertake a transaction like this before the end of the year," the spokesperson said."